Dowrick (1993) is discussed. It is concluded that it is very bard to determine the effects of deregulation or decentralisation, because of the problem of establishing the counterfactual. Nonetheless, there is theory and evidence to support the idea that more decentralised and deregulated wage determination can promote efficiency, but will often lead to a wideuing distribution of earnings. It is noted that to a large extent such changes to wage determination are probably endogenous, being determined by such factors as technological change and international competition, and are thus perhaps as much an outcome as a cause. It is argued that despite much criticism of tbe Calmfors and Driffill bypothesis, there is still much merit in it. To tbe extent that it can provide a useful guide to policy in Australia, decentralisation of wage determination appears to be a more viable optioil than centralisation. If adopted, changes to the tax/transfer system sbould also be contemplated to belp promote both efficient and equitable outcomes.What are the economic effects of deregulation and decentralisation of wage determination? This is a very big question and one that is very hard to answer in a manner that would be widely agreed upon on the basis of either theoretical propositions or empirical findings. This is true of many big questions.It is also the case that in seeking to answer the question a number of subsidiary or additional questions arise, some of which represent important complications in the analysis. Wlhat, for example, do we mean by deregulation and decentralisation of wage determination? What are the theoretical arguments for and against such deregulation and/or decentralisation? Are deregulation/decentralisation exogenous developments that lead to various effects, or are they endogenous? To what extent does the effect of labour market deregulation or decentralisation depend on other types of regulation or deregulation ? Can we observe the outcomes of labour market deregulation and decentralisation internationally, and are there important differences in the effects of partial versus radical labour market deregulation and different degrees at University of Manitoba Libraries on June 25, 2015 jir.sagepub.com Downloaded from